Analysis of the supply and demand in the TFT–LCD market James T. Lin a , Fu-Kwun Wang b, * , Shin-Lian Lo a , Wan-Ting Hsu a , Yen-Tai Wang c a Department of Industrial Engineering and Engineering Management, National Tsing-Hua University, Kuang Fu Road, Hsinchu 300, Taiwan, ROC b Department of Management, National Taiwan University of Science and Technology, No. 43 Keelung Road, Sec.4, Taipei, 106 Taiwan, ROC c Marketing Division, Desktop Display Business Unit, AU Optronics Corporation, Science-Based Industrial Park, Hsinchu 300, Taiwan, ROC Received 26 May 2004; received in revised form 13 September 2004; accepted 14 September 2004 Abstract A methodology for the analysis of the supply and demand in the Thin-Film Transitor (TFT)-liquid crystal display (LCD) market in 2004 is proposed. The quarterly history supply and demand data are collected from 63 factories in Taiwan, Korea, Japan, and China during 2000–2003. This method takes into the account supply, demand, and differences between supply/demand. For the supply, a heuristic approach is used to forecast the future supply. For the demand, a transfer function model is used to forecast the future demand. The difference analysis of the supply and demand shows that it can predict whether or not there appears to be a shortage in the market of 2004. In addition, three important managerial implications such as pricing strategy, product-mix decision, and customer’s priority are discussed in this paper. D 2004 Elsevier Inc. All rights reserved. Keywords: Supply; Demand; TFT-LCD; Transfer function model 1. Introduction Display became a critical interface for connecting the information during the 21st century. The Flat Panel Display (FPD) plays a major role in exploring the advancement of modern IT devices. Chung et al. 0040-1625/$ - see front matter D 2004 Elsevier Inc. All rights reserved. doi:10.1016/j.techfore.2004.09.006 * Corresponding author. E-mail address: fukwun@mail.ntust.edu.tw (F.-K. Wang). Technological Forecasting & Social Change 73 (2006) 422–435